Friday, September 29, 2006

The power of ideas

Hernando de Soto is quite a guy. He has a good idea, he researches and writes about it compellingly. Then he follows up with all manner of speeches and appearances.

And now he gets Bill Clinton (!) to explain it at tout le monde.

"Helping the Poor Register Land"
WSJ, By SALLY BEATTY, September 29, 2006; Page W2

"Establishing land rights for the poor in developing nations turned into the sleeper issue at the second annual Clinton Global Initiative in Manhattan last week, where celebrities, heads of state and the super-rich gathered to raise funds to help solve the world's problems.

"Former President Bill Clinton secured commitments totaling $7.3 billion at this year's conference, up from $2.5 billion last year. But the buzz in the hallways centered on a topic that until recently most philanthropists all but ignored: registering poor people's property so they could borrow against it to build businesses, pay taxes or for other purposes. Many citizens of developing countries don't formally have title to their land, and many economists -- including Peruvian economist Hernando de Soto, another conference attendee -- see this as a key source of urban poverty. According to Mr. de Soto's research, the value of unregistered land in developing countries totals over $9 trillion. Mr. Clinton told the audience that these assets 'cannot be converted into collateral for loans -- wealth locked-up and locked-down -- keeping people in grinding poverty instead of being an asset that can lift them up.' Up to 85% of urban land parcels in the developing world are unregistered, Mr. Clinton said, citing Mr. de Soto's research.

"But standing in the way of widespread land-ownership records are insufficient legal frameworks, confusing procedures and corrupt property registries. And establishing land ownership is all but impossible in communist and socialist countries, where property usually is owned by the state, said John Bryant, chief executive of Operation Hope, a nonprofit in Los Angeles that provides financial services to the poor.

"Calling land ownership 'the cornerstone of economic stability in any region,' Craig DeRoy, president of First American Corp., a seller of title-insurance and credit information, said his company would commit $1 million in cash and in-kind services to develop a 'template' to give the poor in developing countries a way to establish land titles.

"More foundations are beginning to think about land ownership. Patty Stonesifer, chief executive of the giant Bill & Melinda Gates Foundation and another conference attendee, called the discussion about land registration 'intriguing.' Though her group hasn't announced any involvement in the effort, it said earlier this year it will move into funding financial services for the poor."